Infrastructure development is a key driver for progress across the African continent and a critical enabler for productivity and sustainable economic growth. Presently, investment in infrastructure accounts for over half of the recent improvement in economic growth in Africa, however, despite the gradual growth the continent has witnessed in the past decade, the achievement of sustainable development is still hindered by infrastructure deficit and this is costing the continent a lot.
According to one of India’s leading construction and engineering company, Larsen & Toubro (L&T), “Africa stands at a critical stage in its developmental journey although the economic recovery of Sub-Saharan Africa continues, it is at a slightly slower pace than expected. To accelerate and sustain inclusive growth momentum, it is imperative for policymakers to focus on investments that foster human capital, reduce resource misallocation, boost productivity and give preference to vital infrastructure development.”
The Infrastructure Consortium for Africa noted that infrastructure services in Africa cost more than in other continents. The African rural population pay around 60 to 80 times per unit more for energy than urban populations in the developed world. Even the Global Infrastructure 2017 Outlook forecast that the total infrastructure investment for Africa by 2040 would be $4.3 trillion, that is $174 billion each year which is less than many of the best performing economies. The report revealed that, if African economies raise their performance to match that of their best-performing peers, the total investment needed would be $6.0 trillion or $240 billion per year; a difference of almost 40 percent.
When it comes to infrastructure, the continent has the potential to achieve more, little wonder companies like L&T are looking to expand its operations further in Africa by partnering with various African economies to construct vital infrastructure, industrial, hydrocarbon, and metallurgy projects as well as technology services, that will form the backbone of the continent’s overall economy as well as improve growth.
L&T believes it can improve Africa’s developmental journey, having inaugurated 30,000 square feet global delivery centre in South Africa’s Johannesburg, with the aim of providing digital solutions in December 2018, as well as the plans to set up three central processing facilities (CPF) that would produce 11 million cubic metres of gas per day for Algerians.
However, for real development to take place in Africa, there is the need to improve its infrastructure development as it is a key to social and economic transformation. These infrastructures can be in the form of railways, good roads and electricity, which in turn facilitates private investment and improves the standard of living of people.